From Monday until the end of August, the VAT rate for certain fuels will be reduced from 23% to 8%, announced Polish Prime Minister Donald Tusk on Thursday.
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“This is what the Polish people have been waiting for,” D. Tusk told journalists, emphasizing that this measure will help reduce fuel prices as the summer holiday season comes to an end.
It is expected that the VAT reduction will lower retail prices at gas stations by up to 1 zloty (0.23 EUR) per liter, depending on the type of fuel.
“Poland will be at the forefront of Europe in terms of the lowest fuel prices,” added D. Tusk.
The government first introduced these measures under the “Lower Fuel Prices” program at the end of March, when global oil prices rose due to tensions between the US, Israel, and Iran.
Legislation established temporary retail price caps for gasoline and diesel and reduced fuel taxes. These measures were extended several times until the end of June.
Ongoing tension
The reinstatement of the VAT relief on fuel for the last two weeks of August will cost the state budget 495 million zlotys (115 million EUR), the Polish Ministry of Finance told the state news agency PAP.
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“Although fuel prices have temporarily decreased in recent months, allowing market sentiment to stabilize, the current situation requires another intervention,” the ministry statement said.
It added that the “Lower Fuel Prices” program has so far cost the state about 4.7 billion zlotys.
After more than five months of conflict, oil prices continue to fluctuate sharply as investors react to the latest events in the US-Iran conflict.
On Thursday evening, Brent crude was trading at $87.99 per barrel, while WTI was at $82.26 — more than 20% above the pre-war February level.
In response to US and Israeli bombings, Tehran has effectively closed the Strait of Hormuz — a channel through which 20% of the world’s oil and liquefied natural gas (LNG) was transported before the war. This caused an energy price surge and fueled broader inflation.
On Wednesday, US President Donald Trump stated that the US “fully controls” this critical waterway, but Iran denied these claims, with peace agreement negotiations between the two sides at a deadlock.
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